Private banks operate with margins between interest rates which are considerably lower than state banks.
An article in Elfinancierocr.com points out that "the five banks with the lowest margins in the country are private ones, as is clear from a study by EF based on data reported to the Superintendent of Financial Institutions (Sugef) for December, 2012 ".
From October last year to date, public banks in Costa Rica cut their average rate by almost 4.5%.
"In the last four months state banks made a sharp rate cut to place them below the average of other intermediaries and brush with near-zero real returns", reported Nacion.com.
"The banks reduced their rates so that they are now the lowest among the sector and real returns are close to zero.
Managers of large Costa Rican public institutions are coordinating actions with government officials and state banks.
According to an article in Elfinancierocr.com, the meeting held on Monday 14 January is part of a consultation strategy that President Chinchilla is conducting in order to find the best way to control speculative capital inflows.
Alfredo Volio, chairman of the board of Banco Nacional, said: "The idea is to seek a reduction in interest rates, integrating the entire public sector for us to coordinate efforts."
The presidents of Costa Rican state banks said they "do not know why they are paying higher fees" than those paid by private banks.
EDITORIAL
The phenomenon of the nerve with which too many Latin American officials are flaunting their irresponsibility is increasing.
Television pictures showed a formal meeting chaired by the Chief Executive of Costa Rica, President Chinchilla, accompanied by her Vice-Minister of Finance, Central Bank President and other members of the economic team, and presidents and directors of the three main public banks in the country, the Banco Nacional, Banco de Costa Rica and Banco Popular.
Public banks in Costa Rica are competing with the state, paying almost 10% interest in order to raise funds in local currency.
The three state banks and the Banco Popular are offering an interest rate of 10%, while private banks are paying 9% on deposits on terms of between 5 and 7 months.
These periods are the most popular, which is why the government is trying to capture more in this segment, putting pressure on state banks who are also looking for resources in colons because they make the most loans in this currency, while the private banks are largely removed from that segment, said Luis Carlos Mora, chief financial officer of Banco Nacional.